October 27, 2008
UCLA sees O.C. housing's bottom by next summer
By Jeff Collins
UCLA economists forecast today that Orange County will have a $500,000
housing market again, but not for five years.
The UCLA Anderson Forecast
for Orange County projects that home prices, which once grew at a 25%
pace, will fall 9% next year and rise only by 3.5% to 6% over the
following four years. The price is projected to reach $523,563 in 2013.
Still, the UCLA economists are calling a bottom to the market: Summer of
2009.
Prices, said UCLA Anderson Forecast Senior Economist Jerry Nickelsburg,
will begin stabilizing in "middle-to-late 2009."
Mortgage defaults and foreclosures are expected to reach their peak this
year and begin diminishing next year. As foreclosures drop, home prices
will stabilize and fire sale prices for foreclosed homes will no long
depress neighborhood home values.
Existing inventory of for-sale housing has declined from 22 months of
sales a year ago to eight months, the forecast reported.
The report notes that during the first six months of 2008, 38 of the 39
areas examined experienced a decline in median prices for existing
single-family homes.
Laguna Beach is the only area with positive price appreciation this
year, with the median value up 1.7%, the forecast said. The biggest
price drop this year so far was in Capistrano Beach, where the median
fell 45.2%, followed by Santa Ana (-36.9%), La Habra (-29.6%) and
Anaheim (-29.4%).
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